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Samsung Electronics' (OTCPK:SSNLF) fifth-generation high bandwidth memory chips have cleared Nvidia's (NASDAQ:NVDA) evaluation for use in the U.S. company's AI processors, Reuters reported.
The two companies have not yet inked a supply agreement for the approved eight-layer HBM3E chips but will do so soon. The supply is expected to start by the fourth quarter of 2024, the report added.
However, Samsung's 12-layer version of HBM3E chips, are yet to clear Nvidia's evaluation.
Last month, it was reported that the South Korean company's HBM3 chips were cleared for use in a less sophisticated Nvidia graphics processing unit, or GPU, H20, which has been built for the Chinese market to adhere to U.S. export rules. The supply was expected to start this month.
HBM is a type of dynamic random access memory, or DRAM, in which chips are vertically place to save space and curb power consumption. It helps in the processing of huge amounts of data produced by AI applications. The HBM3 chips are the fourth-generation HBM standard currently, usually used in GPUs for AI, and the fifth-generation are HBM3E chips. The market for HBM is led by South Korean companies SK hynix and Samsung and, to a lesser extent, by American chipmaker Micron Technology (MU).
Since last year, Samsung has been trying to pass Nvidia's evaluation for HBM3 and HBM3E. SK hynix is already supplying Nvidia with HBM3 and HBM3E chips.
Last month, Nvidia's CEO Jensen Huang said that the company was reviewing HBM chips from Micron and Samsung to determine if they can effectively compete with SK hynix.
Samsung has been playing catch up to SK hynix in the new generation HBM chips but the company is now narrowing the gap. Samsung had noted in its earnings release last month that it sees strong demand for HBM chips in the second half of 2024 due to AI applications.
Chinese tech companies including Baidu, Huawei Technologies and startups are, reportedly, storing Samsung's HBM chips as they expect new U.S. restrictions on export of the semiconductors to China.
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